Technip Energies Nv

Good day and thank you for standing by. Welcome to the TechNIP Energy's full year 2021 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session and to ask a question during the session you will need to press star 1 on your telephone. Please be advised today's conference is being recorded and if you require any further assistance please press star 0. Now I'd like to hand the conference over to your speaker today, Philip Lindsay, Investor Relations. Please go ahead.

Thank you, Sarah. Hello to everyone and welcome to Technip Energy's full year 2021 financial results presentation. Today on the call, our CEO, Arnaud Piaton, and our CFO, Bruno Viver, will present our business and financial highlights as well as the outlet. We will also present our ESG roadmap through a short video, and this will be followed by Q&A. Before we start, I would urge you to take note of the disclaimer and forward-looking statements on slide two. I will now pass the call over to Arnaud.

Thank you, Phil, and welcome to our full year 2021 financial results presentation. 2021 was our first year as Technip Energies, and I am extremely proud of the way that our teams have delivered despite testing external environment. This was obviously no ordinary year for any of us, but despite the extreme challenges of the COVID pandemic, Technip Energies pulled off some real accomplishments and made an extremely strong start. Let's start with the highlights. Operationally, Our execution was solid throughout, and we achieved notable progress across our portfolio. We drove double-digit revenue growth year over year, and margins at 6.5% well ahead of our original guidance. With a book-to-bill of 1.5, we achieved nearly 10 billion euros of order intake, of which 94% was outside of Russia, notably reinforcing our positions in LNG and SEDN markets. This led to a near 30% improvement in our backlog to $16.4 billion, equivalent to 2.5 times revenues, and providing clear multi-year visibility. Based on the strength of these results, we are very pleased to announce our maiden dividend at 45 cents a share, which is subject to approval at our annual shareholder meeting in May. The dividend reflects our commitment to shareholder distributions and our confidence in our business outlook. Finally, in line with our plans and our promises, today we have published our ESG roadmap and scorecard following an extensive exercise throughout last year. I will return to ESG later in my presentation. Before continuing with the results presentation, let me say a few words regarding the situation in Russia and Ukraine and put our exposure into context. The company is closely monitoring the situation. The safety of our people and the families is, as always, our first priority. We are providing today a financial framework that provides transparency around contribution from Russia. As of year end, 23% of our backlog related to projects under construction in Russia. This primarily relates to Arctic LNG2, which was awarded to us in 2019. In 2020 and 2021 nonetheless, our order intake from Russia has been no more than 6 to 8% of total orders, which will naturally lead to diminishing exposure to that geography. In terms of our P&L, in 2021, Arctic LNG2 was at peak volumes and Russia accounted for around 35% of revenues. However, Looking at 2022, the proportion of our estimated revenue from Russia, assuming business continuity, would have lowered to 20% of the aggregated revenues and trend down further in 2023 and beyond. And in an EBIT terms, we expect any potential impact to be even less, as Russia was estimated to contribute only 15% of our EBIT. As Bruno will discuss later on, what this means is that our 2022 EBIT margin should remain broadly in line with 2021, regardless of our exposure to Russia. This is supported by our long experience of managing contracts in difficult and complex environments. We understand the contractual mechanisms and protections which are crucial to mitigate risk and to sustain the performance of the company. Our contracting discipline ensures positive cash, and if the situation requires, for example, under suspension or termination situations, we would have the means to demobilize and pay our subcontractors all without negative financial exposure. We are financially robust, with gross cash of 3.8 billion euros and liquidity of 4.5 billions. As evidenced by the dividend we are proposing today, our capital allocation framework is intact, and we clearly have the capacity and ambition to invest in our strategy. In summary, Technip Energies is far from a pure Russian LNG play. We are a global, geographically diverse company with an energy transition strategy. And this is more relevant than ever as the current situation will likely accelerate the energy independence and energy transition agenda, notably in Europe. Turning to our operations, we delivered fourth quarter revenue growth of 10% year over year with an excellent performance from technology products and services, TPS, as well as continued momentum in project deliveries. This really represents strong progress despite the challenging environment related to the pandemic, with our operational teams continuing to rise to the challenge. Turning to our commercial highlights, the fourth quarter saw us secure multiple strategically important awards in both TPS and projects delivery. and notably in the domains of carbon capture, sustainable chemistry, and ethylene. In the carbon capture market, our co-investment alongside our partner Shell for the cancer of technology has started to yield success. In the UK, Technip Energies is leading a consortium alongside Shell and GE Gas Power for BP's Net Zero Teesside project, where we are performing a feed competition for power station with 2 million tons per annum of carbon capture facility. And we are also supporting Shell on other projects in the UK and the US. In addition, the Gasha mega project in the UAE will see us design a carbon capture unit to be integrated into the development. This is yet another example of how traditional industries are also decarbonizing. Turning to sustainable chemistry, our PMC team has been awarded feed and early EPC services for 100 million pounds waste from recycling plants in the UK with the capacity to process 80,000 tons per annum of used tires. But we also entered into a strategic partnership with Wastefront to deploy their unique circular model globally. Our proprietary Hummingbird technology continues to enjoy success in the renewable fuels domain with fleet studies awarded by LanzaJet for two near-identical sustainable aviation fuel units in the UK and the Netherlands. Finally, in project delivery, the Boruch War Project is a substantial EPC award and a particularly pleasing win as the strength of our technology offering yielded the strongest life of project economics. In summary, a positive conclusion to a very successful year commercially for Technic Energies. Before handing over to Bruno, I want to say a bit more about our commercial model because it's really at the heart of how we manage the business and what sets us apart. In addition to our well-known selectivity criteria, in the past year, we have added ESG as a key metric. This means that we assess a project's potential to integrate sustainable development and contribute to the Paris goals. We promote decarbonized solution in front-end design and tender phases and ensure we are mitigating environmental impact. And we will scrutinize whether it meets our high compliance and government standards. Turning now to our ground rules, being engaged early, meaning 10, executing the feed study, gives us the chance to define and optimize a project's scope. This considerably de-risks execution, as well as ensuring economic viability. And this early engagement is a prerequisite for us when bidding on any large-scale EPC with lump-sum content. Let me repeat. We will not enter into large EPC projects without it. Beyond early engagement, it's all about discipline in our contractual negotiations. Every contractual framework has to be compliant with our risk management policy and ensure that we are rewarded for the risk we take and protected from risks beyond our control. Supported by our asset-light model, at Technip Energies, there is no such thing as a must-win project. We continue to mitigate risk and exposure throughout the contractual phase, notably in procurement. When we sign contracts, we also sign back-to-back with our supply chain to ensure that a very large proportion of our costs are logged in at the point of signature. When it's not possible to do this, we use escalation clauses or go reimbursable. And we consistently monitor progress on our portfolio through monthly project management reviews with intense focus on project progress and cash flows. So in summary, our disciplined commercial approach reduces risks, ensures quality of backlog, and provides consistency in performance. And we're confident this discipline will serve us well as we embark on our energy transition journey and enter new markets. I will now turn the call over to Bruno to discuss our financial performance in more detail.